The US Regional Bank Index closed down 6%, the biggest drop since the Bank of Silicon Valley went out of business in March last year. NYCB unexpectedly reported losses in the fourth quarter and announced a sharp cut in dividends by more than two-thirds. Due to the acquisition of Signature Bank, which went out of business in March last year, the bank managed assets exceeding 100 billion US dollars and needed to meet new regulatory requirements. NYCB closed down nearly 38%, the biggest drop since listing.
The banking crisis triggered by the Bank of Silicon Valley in March last year is still fresh in my memory. The financial report of a US regional bank also made investors worry about the future of small banks.
Before the market on Wednesday, January 30th EST,$New York Community Bancorp (NYCB.US)$A loss of US$260 million, or $0.36 per share, was announced for the fourth quarter. Compared with earnings per share (EPS) of $0.27 for the same period a year ago, EPS lost 0.27 US dollars after adjustments for the quarter, while analysts requested EPS profit of 0.26 US dollars.
NYCB recorded revenue of 886 million US dollars in the fourth quarter, an increase of 53.6% year over year, which is still lower than analysts' expectations of US$929.5 million. The bank's loan loss provision for the quarter reached 552 million US dollars, far exceeding the 62 million US dollars in the third quarter.
Meanwhile, the NYCB announced that it will drastically cut dividends by more than two-thirds in order to accumulate capital to meet US regulatory requirements and meet the regulatory authorities' capital requirements for Class IV banks with assets of 100 billion to 250 billion US dollars.
NYCB CEO Thomas Cangemi said that after acquiring the assets and liabilities of Signature Bank, which went out of business in March last year, the assets managed by NYCB exceeded 100 billion US dollars and are adapting to the requirements of regulators for large banks, and “must follow higher prudential standards, including capital requirements and liquidity standards based on risk and leverage.”
After the financial report was announced, NYCB jumped 42.6% lower. At the beginning of the session, it fell more than 46% and closed down 37.67%, the biggest intraday and closing decline since its launch in November 1993, far exceeding the bank's 13.8% decline on September 22 during the 2008 global financial crisis.
Regional banks in the US generally declined after opening on Tuesday, due to a sharp drop in the constituent stock NYCB. The regional banking index KBW Nasdaq Regional Banking Index (KRX) closed down 6%, the biggest one-day decline since March 13, 2023, that is, the biggest daily decline since the Bank of Silicon Valley went out of business in March.$Spdr Series Trust S&P Regional Bkg Etf (KRE.US)$It fell nearly 6%. Among the constituent stocks,$Zions Bancorp (ZION.US)$und$Comerica (CMA.US)$It closed down 5.7% and 5.4%, respectively.
At a time when regional banks are plummeting, the price of US Treasury bonds is rising, and the yield curve is getting steeper. The commentator said that the short-term bond yield curve may still be sensitive to the sharp decline in bank stocks, because this makes investors worry that the banking crisis of March last year will be repeated, and that the US banking system is still vulnerable.
Editor/Somer